N.H. Supreme Court to hear Portsmouth hospital ownership case

PORTSMOUTH — The lengthy and costly legal custody battle over Portsmouth Regional Hospital will head to the New Hampshire Supreme Court for final resolution.

Michael McCord

PORTSMOUTH — The lengthy and costly legal custody battle over Portsmouth Regional Hospital will head to the New Hampshire Supreme Court for final resolution.

The Foundation for Seacoast Health said Wednesday it will appeal the Sept. 15 ruling by Judge Kenneth McHugh of Rockingham County Superior Court. McHugh ruled Portsmouth Regional Hospital will remain under the control and ownership of the Hospital Corporation of America, which purchased the former Portsmouth Hospital in 1983.

The Foundation, which was formed to oversee the operations of the hospital following its purchase by HCA in 1983 and to protect community health care interests, decided to continue the fight. Board chair Dan Hoefle said the board voted unanimously to have its lawyers appeal McHugh's decision.

“After meeting with counsel, the board feels that it is imperative to file this appeal in order to fulfill its fiduciary obligations to the Seacoast community,” Hoefle said.

He added the firm board support for legal action has been consistent since the first legal action was initiated in late 2006. The appeal will be filed in the coming weeks. The Foundation has spent more than $7 million in legal fees over the past five years.

The legal fight stems between the Foundation and HCA, one of the nation's largest hospital corporations, has centered on the original 1983 sales agreement that the Foundation claimed would require Tennessee-headquartered HCA to give a right of first refusal for the Foundation to reacquire the hospital in case of an ownership or asset change or a degradation of health care quality at the hospital.

The Foundation first filed suit in 2006 and claimed hospital's ownership changed with a $33 billion private equity and debt assumption purchase of HCA in 2006. Though the state Supreme Court ruled in 2008 that the 1983 sales agreement was not violated with the 2006 sale of HCA, the court said it might have been violated in 1999 during a corporate restructuring by HCA. In December 2009, McHugh ruled a breach of contract had occurred with the 1999 restructuring. HCA appealed to the state Supreme Court but in February 2010, the high court decided to delay hearing the appeal until McHugh issued judgment on the penalty for the contract breach.

McHugh's Sept. 15 ruling was a split decision, affirming that HCA had breached the contract but strongly rejecting the right of first refusal remedy sought by the Foundation.

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.

Advertise

Original content available for non-commercial use under a Creative Commons license, except where noted.
seacoastonline.com ~ 111 New Hampshire Ave., Portsmouth, NH 03801 ~ Privacy Policy ~ Terms Of Service